Property tax is an amount that a property/land owner pays annually to the local or state government. The municipal authorities collect this tax from citizens as revenue to fund the upkeep and improvement of civic amenities, education, transportation, recreation, local infrastructure, etc.
In India, property tax is levied on assets that classify as ‘real property’ and mostly include land and buildings. Property owners can pay their property tax online or offline based on its valuation and appraisal as per the locality.
The amount collected as property tax by a municipality, a municipal corporation or a panchayat within a state or city can vary depending on the locality’s type of levy, amenities available, and other similar factors.
The general formula for municipal tax calculation is –
Tax on property = Property’s base value x building type x age factor x its built-up area x floor factor x use category
Although different civic corporations can compute this tax differently, the common calculation is undertaken in a few steps given below –
Additional factors that can determine a property tax’s rate include –
Based on these factors, one can assess and pay their property tax online as per the rate applicable.
During property tax calculation, the municipal authorities use either of the following methods of computation –
Property tax calculation under this system is done as a percentage of a land or building’s market value, whereby such value determination is done by the government based on its locality.
This method utilises the yearly rental value of a property derived for tax estimation. Such rental value can either be an actual rent collected or a deemed value as per the locality and availability of amenities.
Calculation of property tax under this system is based on the unit price for a property’s built-up area.
Once the amount of tax is assessed, you can proceed with the payment of property tax online at the concerned website of your municipal corporation.
Additional Read: GHMC Property Tax
Depending on the state and locality of a property, payment of municipal tax can be subject to the following exemptions or concessions.
These concessions are applicable only if a property is self-occupied and used for residential purposes. Subject to these concessions, individuals can pay their property tax online as per the assessed value for their type of property.
There are several municipal corporations in India that allow paying property tax online. It is a hassle-free process that involves only some simple steps and minimum documentation. Here is how you can pay your land tax online in India.
After you complete the process of paying your house tax, you will be able to download the tax receipt online as well. With the introduction of online payment, keeping track of and filing such taxes have become significantly easier and time-saving. You will be able to access all the necessary details like e-receipt on property tax, filed tax report, etc. as soon as you complete the process.
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You can also choose offline payment method to pay the due amount. In this case, you have to download the payment challan and pay the tax within the due date as printed on it.
Documents received during municipal tax payment, including tax receipts, should be kept for future use. These receipts will also be required for other purposes, like if you have to file income tax on sale of land. You will also have to present the same when you apply for a secured loan, as during application you will have to present previous tax receipts.
Features like loan against property tax exemption also require submission of previous tax receipts to benefit from the deduction.